Municipal golf courses are the entry door to the game. With the burgeoning participation of youth via Drive Chip Putt, Girls Golf, Golf-In-Schools Program, PGA Junior League and The First Tee, one might be bullish on the over 2,000 municipal golf facilities being able to help grow the game.
I am not.
The organizational structure and culture that pervades the vast majority (but not all) of municipal golf ranges from negligent to mediocre. From inept accounting practices where cash flow statements provide little clarity, to Purchasing Department bureaucracy, to labor benefits exceeding 40% of base pay, to excessive common service allocation fees charged to the Golf Enterprise Fund, to antiquated hiring/dismissal practices, to politics where fiscally attuned City Managers battle City Council members seeking reelection by placating the proletariat, and to well-to-do citizens demanding that low-priced golf via highly discounted season passes is their right, municipal golf is a great example of waste, inefficiency and fraud.
Here are some examples we observed just in February, 2017.
A Collier County, FL Purchasing Specialist writes, “Thank you for your interest in project 17-7086 Golf Course Analysis for Collier County. My original quote platform was flawed as I did not request references to determine the responsibility of the firms that submitted. I re-posted the quote under 17-7086R.
Collier County subsequently rejects 5 of the 6 bids submitted on technicalities, including that of the National Golf Foundation, accepting a sole bid that was 100% higher from, in our opinion, the least qualified firm. Some were rejected because they were “digitally signed” and deemed not to be a legal instrument though such is recognized as valid by the courts.
A five course municipality, received a comprehensive strategic plan from the National Golf Foundation dated December, 2013, implements none of the recommendations, and issues another RFP in November 2016 for consulting services because $50,000 was budgeted on a spend or lose basis and selects the least qualified firm. They are skilled at landscape architecture and urban design but it is my opinion that they know little about golf operations at the level of sophistication necessary to create value. I do concede that the firm is smarter than the client they are guiding. Note that we did not bid recognizing the folly of their practices and that the exercise would be a wasted effort. We only accept engagements where we can make a positive difference.
The General Fund of a four course municipality charges Golf’s Enterprise Fund $1,053,250 annually in general and golf administrative fees to oversee those courses that gross $5.3 million in 211 playable golf days. Yet, they cannot find the money for desperately needed for capital investment resulting in a quickly deteriorating customer experience.
A County Water Department charges a City 27-hole and 9-hole golf course $589,000 and $229,000, respectively ($889 per acre feet) for non-potable water. The General Fund has had to transfer $2.5 million in three years to keep the Golf Enterprise Fund aloft. The 2017 budget calls for an additional transfer of $1 million.
The benefits paid for three cities we reviewed were 39.2%, 47.1% and 54.2% of base pay. The labor burden makes these courses financially unsustainable without General Fund transfers.
I ponder if the most egregious error a municipality makes is the organizational structure adopted in which concessionaires are retained to operate the pro shop. The City receives the green fee revenue but is responsible for all maintenance and capital improvements. The concessionaires are entitled to all cart, range, merchandise and food and beverage revenue paying only a small percentage of income to the City. The City gives away the lucrative profit centers and accepts the responsibility for the highest financial burden. In the three multi-course municipalities we examined in February, all had two things in common – massive operational losses and deferred capital investment exceeding $15 million.
That begs the question, should municipal golf course be in the business of golf? The fundamental role of government is to provide for citizens that which private enterprise would not undertake. Core services, as shown below, are police, fire, utilities and water. It is understandable that parks, library and ball fields be funded. But golf?
All of this is tragic. Municipal golf courses, if properly managed, should thrive. They are located in urban centers where the demand for golf vastly exceeds the supply. The threat of new competition is nill.
Municipal golf courses are calling out for professional management. That is what I think. What is your opinion? Comment below.